What I'm Thinking About

Prepad debit and the future of banking

Bottom line, I think the financial industry is cancer, a useful part of our economy that has outgrown its utility to the degree that it inflicts pain and threatens the vitality of society as a whole.

Based on some conversations with friends who know the industry intimately, I’ve formed the opinion that our only hope is to box in the big banks and create room for alternatives to emerge and thrive. It is from this point of view that prepaid debit, particularly a new card called Bluebird, from Wallmart and Amex, interests me.

Bluebird, like many other prepaid debit cards, tend to target people in compromised financial positions who can’t afford a normal checking account. Financial services targeted at this sector are often exploitive, because the customers have few options.

I have many complaints against Wallmart, but they’ve managed to thrive by offering their customers low prices, and the Bluebird card appears to follow the same pattern by offering customers a better deal than competing offerings. I hope this is a situation where Wallmart can do well by doing good.